Study

Even with the latest technological advancements in digitization, many trading organizations are still failing to integrate new technologies and make improvements in terms of data management, process optimization and efficiency.

For trading organizations to secure future success, it is crucial that they enhance performance and process efficiency, while also bringing down costs – not least considering trends moving towards more automated trading, a growing number of traded contracts and use digital use cases. New technologies can only be integrated into the current business model if a holistic approach is applied. Horváth & Partners has surveyed several companies in the energy trading sector with questions across a range of areas, in order to make a fair assessment of the current status in the field.

Overview of the key findings:

Automated trading in intraday and day-ahead power markets allow more strategies to be traded as well as generating higher PnLs per trader, while automation in gas trading still lags in automation but is expected to lock up with power in the upcoming years

Back office processes like validation, confirmation and settlement can be highly automated and hence increase process efficiency within the back office, which is required especially when trading volume is constantly rising

Costs for reporting clearly depend on the number of trades. Introduction of BI tools and modern data layer technologies will increase efficiency and enhance the steering across the portfolios as well as improve decision making in front office

So far, data science or machine learning use cases are rarely implemented. Participants have different focuses on trying various digital use cases